Scrap property transfer tax for exploration companies – AZMEC

Investors in the mineral exploration sector want exemption from property tax. The Association of Zambian Mineral Exploration Companies (AZMEC) says paying property transfer tax levied at 10 percent from exploration stage of mining dents profit.

Geoffrey Mulenga AZMEC President speaking during the 10th AZMEC Explorers Forum  held under the banner: ‘Exploration in Zambia-innovation in exploration’ said government should exempt the exploring companies from the levy introduced two years ago.

“We are asking for exemption until projects start production so that Government through Zambia Revenue Authority (ZRA) does not rely on what is spent on exploration works to tax an entity,”  said Mulenga.

AZMEC wants government to expedite the payment of value added tax (VAT) refunds owed to mineral exploration companies.

“Our members are owed over US$ 1 million in VAT refunds, so government should pay back,  the way they have done to copper -producing companies,”  Mulenga said.

Christopher Yaluma,  the Minister of Mines and Mineral Development admits that mineral exploration is a costly and risky venture.

“But it is important because if there is no exploration there cannot be actual mining.

“The new mines we have in North Western Province are due to extensive exploration, even old ones could have winded up operations had it not been for new methods of exploration that has resulted in extension of the lifespans,” Yaluma said.

Meanwhile,  Yaluma said government has introduced reforms to ensure sustainability of the mineral exploration industry.

“We have increased the land given to exploration firms from 1,000 square kilometres to 2,000 square kilometres, and also tenure for licences has been increased from five years to seven years.

“We will engage the Ministry of Finance to see how the issue of property transfer tax can be addressed since exploration stage is not profitable at all,” he said.

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